Indices Technical Analysis - page 8

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mazennafee, 2014.07.30 13:56

WTI And Brent Slightly Higher Amid Falling US Stockpiles

 Oil futures held soft gains early Wednesday as anticipated key US data and the Federal Reserve`s decision on US monetary policy for the next price direction.

Oil markets received a boost after data from American Institute of Petroleum (API) on Tuesday showed larger-than-expected decrease in oil inventories; about 4.4 million barrels in the week ending July 25, bringing the total stocks at 369.4 million barrels.

Over the past days, prices were experiencing a significant decline to near breaking levels of $100 a barrel, amid weak demand for oil in Europe and Asia with ample supplies in the Atlantic region, overshadowing the geopolitical tensions in both the Middle East and Ukraine.

On Wednesday, the FOMC will announce the rate decision for July, with expectations to keep the benchmark interest rate at a record-low 0.25%, as well as the completion of the Federal withdrawals for the quantitative easing policy, bringing down the program to $35 billion $25 billion.

The QE3 program will be reduced by buying government bonds to 15 billion dollars from 20 billion, with a reduction of real estate-backed bond program to $10 billion from $15 billion. The Fed is expected to continue withdrawals until October 2014 amid growing expectations that the US central bank will hike the interest rates earlier than expected.

The US jobs report, due to be released Friday, is expected to indicate more evidence on the health of the US labor market, which has recently witnessed a remarkable development after a very low unemployment rate, expected to stay at 6.1% in July, while the consensus are calling for 225-thousand gain in non-farm payrolls this month, from the previous increase of 288 thousand.

The Dollar Index, which measures the performance of the dollar against a basket of major currencies, rose for the seventh day in a row reaching levels of 81.37, compared with the opening level at 81.29.

On the oil markets, West Texas Intermediate for September delivery traded around the levels of $101.57 a barrel, from an opening price of $101.00 a barrel, setting the highest level at $101.58 a barrel and the lowest at $100.84 a barrel.

As for the European benchmark for crude oil, Brent fell 0.06% to trade in a rangebound around the levels of $107.66 a barrel.


 

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mazennafee, 2014.07.30 13:59

Gold Looking For Support At $1300

 For the few days to start this week Gold has been slowly but surely easing back towards the $1300 level where it is now looking for some support.  In recent hours it dropped sharply through this level however it has held up above $1298.  Gold did well at the end of last week to surge higher through the $1300 level back up towards $1310 before easing slightly to start this new week.  The $1300 level has been reinforced as a level of significance in the last couple of weeks with gold falling sharply from its highs above $1345 back down to this level where it has been met with overwhelming demand.  During the second half of June, gold steadily moved higher but showed numerous incidents of indecision with its multiple doji candlestick patterns on the daily chart. This happened around $1320 and $1330. Several weeks ago now gold enjoyed a stunning surge higher to break through some key levels along its way to reaching a then two month high just above $1320 and immediately after it eased away ever so slightly and consolidated with its flow of doji patterns. It was then able to slowly move higher to a four month high above $1345. It was also able to break through the $1300 level which has recently played a role again. If sellers do take advantage of these relatively higher prices which will most likely bring the $1300 level back into play. The OANDA long position ratio has surged back up towards 70% showing a change in sentiment to more bullish.

At the beginning of June, gold did very well to repair some damage and return to the key $1275 level, then it has continued the momentum pushing a higher to its recent four month high. After moving so little for an extended period, gold dropped sharply several weeks ago from above the well established support level at $1275 as it completely shattered this level falling to a four month low around $1240. It remained around support at $1240 for several days before its recent rally higher. Prior to the strong fall a few weeks ago gold had remain fixated on the $1293 level and had done very little as volatility has dried up completely resulting in gold moving very little. It pushed down towards $1280 before sling shotting back and also had an excursion above $1300 for a short period before moving quickly back to the $1293 area again. Over the last few weeks gold has eased back from around $1315 to establish its recent narrow trading range below $1295 before its recent slump.

Over the last few months the $1275 level has established itself as a level of support and on several occasions has propped up the price of gold after reasonable falls. Throughout the second half of March gold fell heavily from resistance around $1400 back down to a several week low near support at $1275. Both these levels remain relevant as $1275 continues to offer support and the $1400 level is likely to play a role again should gold move up higher. Through the first couple of months of this year, gold moved very well from a longer term support level around $1200 up towards a six month higher near $1400 before returning to its present trading levels closer to $1300.

Gold ended the trading session lower on Tuesday as uncertainty before a Federal Reserve policy meeting and key U.S. data later this week pulled the metal back from a one-week high hit on the back of violence in the Middle East and Ukraine.  The Fed kicks off a two-day meeting on Tuesday, with markets watching for clues as to when the U.S. central bank will begin increasing interest rates. The bank will make a statement on Wednesday at the end of the meeting.  Gold is highly sensitive to any changes in U.S. monetary policy. It rallied to record highs in the wake of the financial crisis after the Fed's extraordinary stimulus measures drove down interest rates while stoking fears of inflation.  U.S. gold futures for August delivery settled down $5.00 at $1,298.30 an ounce. while spot gold was last down 0.3 percent at $1,299.60 an ounce, having peaked at $1,312.10 earlier.

 

 

Gold July 30 at 03:10 GMT   1299.5   H: 1300.4   L: 1298.2

Gold Technical

S3S2S1R1R2R3
1300127512401330------

During the early hours of the Asian trading session on Wednesday, Gold is trading in a very small range just below the key $1300 level after having recently dropped sharply back through this level in the last 24 hours.  Current range: trading right below $1300 around $1299.

Further levels in both directions:

• Below: 1300, 1275 and 1240.

• Above: 1330. 


 

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mazennafee, 2014.07.30 14:01

Gold/Silver Ratio At Bottom Of Trendline: Ready To Rally?

Ratio traders may find it interesting that the gold/silver ratio has pulled back to its major trendline on the weekly chart. Is this an opportunity to go long the ratio?

 








 

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mazennafee, 2014.07.30 14:08

The Miners Lead A Rising Tide

 The asset relationships we have focused on over the past several weeks, is showing patterned replication in its' leading proxy (precious metals miners) - just as the other lagging sectors look to begin making their respective pivots. 


While those panning silver and gold have viewed the early July highs as a bearish echo of the Q1 interim top, we have approached the recent consolidation trend as commensurate with the move out of the cyclical low last December.

With respect to the kinetic asset sequence of the broader macro story, precious metals have led the moves in long-term Treasuries - which eventually have led a rising tide in a larger basket of commodities. 

 

 

 

 

 


 

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mazennafee, 2014.07.30 14:09

Gold Miners Set To Lead The Market

  Gold miners are some of the best performing assets of 2014. Not all gold miners are up big but I believe the laggards will join the leaders once gold breaks out definitively. Gold mining ETFs are at the top of the ETF ranks this year. If you plot Market Vectors Gold Miners (ARCA:GDX) or Market Vectors Junior Gold Miners (ARCA:GDXJ) against SPDR S&P 500 (ARCA:SPY) on a relative basis a key technical event is unfolding. Gold miners are starting to hold the 50 day moving average on this relative chart and the 50 day is tightening with the 200 day moving average. This is a very bullish formation and a break above the 200 day moving average would confirm leadership in the stock market for the gold stocks.

 


 

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mazennafee, 2014.07.30 14:14

Gold Takes A Dive On Upbeat US Consumer Confidence Report

  Crude Oil

U.S. crude futures dropped on Tuesday amid concerns that this week's supply data will depict a U.S. economy that is awash in crude. Crude futures drop on U.S. supply concernsSupply concerns offset geopolitical events, upbeat U.S. data and pressure oil prices lower The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 1 million barrels in the week ending July 25. Despite concerns that conflict in Ukraine and across the Middle East may disrupt supply, shipments have continued to flow normally, with sentiments that the U.S. is brimming with crude oil often overshadowing upbeat U.S. data. The Conference Board reported earlier that its consumer confidence index rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007, defying consensus forecasts for a decline to 85.3.

 

Gold

Gold prices dropped in U.S. trading on Tuesday after an upbeat consumer confidence report sent investors betting that the Federal Reserve will deliver an positive take on the U.S. economy at a policy meeting this week and make fresh cuts to its stimulus program that has supported the yellow metal for years. Gold takes a dive on upbeat U.S. consumer confidence report, Gold drops as cheery U.S. consumer confidence report fuels bullish Fed expectations Data released earlier bolstered the dollar and in turn, pushed down gold, as the two assets tend to trade inversely with one another. The Conference Board reported that its consumer confidence index rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007, defying consensus forecasts for a decline to 85.3. The data sent investors betting that the Federal Reserve will conclude a policy meeting on Wednesday announcing fresh cuts to its monthly bond-buying program and deliver an upbeat take on the U.S. economy.

 

 


 

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mazennafee, 2014.07.30 14:21

Other Currencies Emerge As An Alternative To USD, Gold Benefits

 Last week, the main drivers behind the gold prices were the situation of the Malaysian Airlines jet downing in Ukraine and Israel’s invasion of Gaza. For now it seems that the other hot-spots especially those in Syria, Libya and Iraq have been temporarily forgotten. 


On Thursday, gold prices fell on Comex once again, in what was yet another bout of concentrated selling on two occasions. It is estimated that $1 billion worth of gold futures were sold in a matter of seconds on the open of the market. However, despite posting an overall decline for the week, the price of gold rebounded strongly on Friday even though the US dollar gained against most of the other major fiat currencies. At the time of writing, the price of spot gold is trading above $1310 an ounce.

As Western media continue their propaganda regarding current geopolitical tensions, little attention has been paid to some major events that are developing in the global monetary system. And, while the U.S, and the European leaders impose more sanctions on Russia, their very move is prompting Russia to reduce its dependence on the US Dollar.

Last week, U.S State Department spokeswoman Marie Harf gave the press atruly comical performance. After blaming Russia for the Malaysian air disaster and claiming the U.S. has evidence that Russia intends to deliver powerful rocket systems to pro-Russia rebels in Ukraine, Ms. Harf declined to provide details about the systems or about how that conclusion was reached. And, when questioned by Associated Press journalist Matthew Lee over how the conclusion was reached, she attempted to ignore his questions and instead asked for other questions. But, Lee politely demanded a response. 

“Marie, I think that it would be best for all concerned here, if when you make an allegation like that you’re able to back it up with more than just ‘Because I say so,” Mr. Lee said.

Ms. Harf disagreed with the assertion: “That’s not what I said. It’s based on intelligence information. It’s not because I said so.”

Recently, a meeting between the leaders of the BRICS countries resulted in an agreement on a new financial system and currency pool.

BRICS is the acronym for an association of five major emerging national economies. Brazil, Russia, India, China, and South Africa. The grouping was originally known as “BRIC” before the inclusion of South Africa in 2010. The BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs; all five are G-20 members. 

As of 2013, the five BRICS countries represent almost 3 billion people with a combined nominal GDP of US$16.039 trillion and an estimated US$4 trillion in combined foreign reserves. As of 2014, the BRICS nations represented 18 percent of the world economy. 

Brazil is a large country, but it is a relatively poor nation. 

While Russia is rich in oil and natural gas, it does not have much else going for it, and its economy is still quite small in comparison to the United States.

Although India has a population of well over 1 billion, it is a relatively poor country, plagued with bureaucratic regulations and a terrible currency. However, it is the second largest importer of gold in the world.

On the other hand, China is fast becoming a force to be reckoned with. The developments that have taken place there in the last 35 years have been astonishing, resulting in one of the greatest gains in wealth in history over such a short time span. Hundreds of millions of people have been lifted out of extreme poverty.

As for South Africa, there is not much to say. While Western leaders applaud the country for its so called democracy, they fail to mention that nation has one of the most corrupt governments in the world and the country is plagued with crime. Armed robberies, housebreaks, hijackings, murder and rape occur on a daily basis. Electricity prices are one of the highest in the world and so is the unemployment rate. Property rights have been weakened there, and the country is quite insignificant in global economic matters. And, South African leaders seem to know nothing about wealth creation and are more intent on the redistribution of wealth instead of the production of wealth. 

Perhaps, South African leaders should take a lesson from Adam Smith who outlined in his book the Wealth of Nations how great empires depend on an educated, productive and prosperous citizenry. Or they should follow the policies of successful countries such as China, Singapore and United Arab Emirates instead of emulating the ideologies of leaders such as Robert Mugabe of Zimbabwe or Hugo Chavez of Venezuela. Nevertheless, what is significant about the BRICS nation is that they have established a new development bank and a reserve fund set up to offset financial crises. 

The BRICS Development Bank – with an initial US$50 billion in capital – will be not only BRICS-oriented, but invest in infrastructure projects and sustainable development on a global scale. The model is the Brazilian BNDES, which supports Brazilian companies investing across Latin America. In a few years, it will reach a financing capacity of up to $350 billion. With extra funding especially from Beijing and Moscow, the new institution could leave the World Bank in the dust. 

And then there’s the agreement establishing a $100 billion pool of reserve currencies – the Contingent Reserve Arrangement (CRA), described by Russian Finance Minister Anton Siluanov as “a kind of mini-IMF”. That’s a non-Washington consensus mechanism to counterpunch capital flight. For the pool, China will contribute with $41 billion, Brazil, India and Russia with $18 billion each, and South Africa with $5 billion.

Since its first summit in Ekaterinburg, Russia in June 2009, BRICS has grown into what it is today: an increasingly consolidated geopolitical alliance of powerful countries bent on neither allowing the Western powers to call the shots in today’s world, nor to threaten them. Furthermore, it will not allow the West to impose its currencies, and its debt-based economic philosophy on everybody.

Meanwhile, China continues to develop the yuan into a global currency. Only last month China's central bank said it plans to designate clearing banks for its currency in Paris and Luxembourg, as the two financial centres battle with London to become the leading European offshore yuan-trading city.

The French and Luxembourg central banks have signed agreements with the PBOC allowing for greater cooperation in the oversight of their domestic yuan market. Also, Singapore and Sydney are also vying for a significant share of the global yuan market, which is expected to expand rapidly along with China's fast-growing economy. 

In addition to designating a clearing back in London earlier this month, the PBOC also announced on June 18 that the yuan can now be exchanged directly for British pounds in Shanghai's foreign-exchange market. Previously, traders have had to exchange the currencies through the U.S. dollar, which added to transaction costs.

In 2013, yuan foreign-exchange trading in London reached $25.3 billion a day, up 50% compared with 2012, according to data released earlier this month.

China's currency has become increasingly popular in settling total trade. In the first three months, 18% of China's total trade, or 1.09 trillion yuan, was paid for in yuan, up from 14% in the fourth quarter of last year, according to Bank of China. That compares with just 1% of China's total cross-border trade five years ago.

For the long term, China wants to turn the yuan into a global reserve currency that is used for investment, trade and loans, as are the dollar and euro. A widely accepted yuan could help Chinese companies alleviate foreign-exchange risks. We may even see a gold backed yuan! 

The result of these developments will ultimately reduce the hegemony of the US dollar which in turn will lead to a loss of faith in the greenback. But, in addition to this, I expect geopolitical tensions to deteriorate in the coming months. This will prompt Western governments to further debase the major currencies of the world and destroy the wealth of the middle class.

The end game will be an economic collapse and the destruction of our current monetary system. However, countries and individuals that have reduced their dependence on fiat currencies and have followed a policy of sound money that includes holding physical gold will survive this coming crisis.


 

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mazennafee, 2014.07.30 14:24

Silver Stuck In Descending Wedge

 The silver market can be rather confusing for a lot of traders, but there is hope that it’s not too hard to understand as it bounces around on technical patterns on the chart.

 

 Source: Blackwell Trader (Silver, D1)

After a strong touch on the bearish trend line silver has looked to range back downwards in a descending wedge, and that’s not surprising given that markets are starting to look up at the U.S dollar. All forecasts this week are expected to show positive results for the U.S economy, whether that is actually true remains to be seen. But, it’s a positive sign when forecasters are looking forward with some optimism.

So with a descending wedge, it generally means that we will see a bullish breakout higher at some point. Currently the market is at 20.57 and further lows look very much possible. I am targeting the 20.04-19.73 area which has shown in the past to be a turning point with high volume and liquidity in the market. Traders will be looking to target this area as well.

Movements lower though could struggle if U.S. data is weaker than expected, however, the current trend line will likely trap movements higher in the event of weaker U.S. data.

Overall, bearish sentiment remains in the short term until we get below the present 20.00 dollar an ounce mark, and strong U.S. data will help extend this push lower. A strong non-farm reading might even push it completely into the range we are targeting and in turn help provide a breakout of the present descending wedge.


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